Senate minority leader Chuck Schumer has hailed the unemployment-benefits provision in the coronavirus economic relief bill as paying furloughed and unemployed workers their full salaries for four months, but several GOP senators are sounding the alarm that in some cases unemployment benefits would exceed full salaries of workers and therefore encourage unemployment.
“It appears that when you look at the interaction of different programs in this bill, there are multiple cases where folks would get more money, and in some cases significantly more money by being unemployed than if the employer-employee relationship were maintained,” Nebraska GOP senator Ben Sasse tells National Review. “It’s perverse. It’s against the purposes of the legislation, and it could exacerbate life-threatening shortages in a number of critical sectors.”
The bill is designed to encourage employers to keep their workers on payroll by providing small-business loans that will be forgiven if employers don’t lay off their employees. “The amount of the loan eligible for forgiveness will be reduced proportionally by the number of employees laid off during this period relative to the borrower’s prior employment levels,” according to a background document.
But Sasse says the bill provides for $600 weekly unemployment benefits in addition to the standard amount a person would receive in unemployment in addition to standard amount of unemployment. The total amount of unemployment benefits could thus exceed a worker’s full salary.
“You can’t have the perverse disincentive to uncouple employers and employees,” says Sasse. He cites the example of home health aides potentially receiving more money from unemployment than full employment as an example of the bill creating a “life-threatening shortage” of workers in a critical sector.
Sasse, along with Senators Tim Scott, Lindsey Graham, and Rick Scott, are introducing an amendment to cap unemployment benefits at a worker’s full salary.